What is BI in the Distributive Trades?
BI stands for Business Intelligence, which is an umbrella term for the tools and systems that enable a company to gather, store, access and analyse corporate data, so as to make better decisions and improve performance.
BI software is big business, and it’s growing fast, with the market for BI tools predicted to be worth $114 billion by 2018. Hardly surprising, when research shows that investment in BI can offer a tenfold return.
Why use BI in the Distributive Trades?
Wholesalers, distributors, merchants and retailers are under particular market pressures that mean that they need high quality information and analysis in order to survive. Those pressures include:
- Complexity of operations: Typically, firms in the distributive trades carry massive numbers of products, deal with diverse supply chains and serve many different customers and customer types.
- Market change: The growth of the internet has disrupted how wholesalers, distributors, merchants and retailers do business. To be competitive, it is no longer enough to just offer e-commerce, firms need to operate seamlessly across all channels.
- Escalating customer expectations: Again, the internet has changed how customers buy. B2B buyers now expect the same high levels of service, fast delivery and keen pricing that they get on the top consumer retail sites.
- Narrow margins: Profit margins have been squeezed further in recent years. In particular, traditional bricks and mortar operators are finding it hard to compete with ‘online only’ companies, which have much lower overheads. Firms need to redress the balance by increasing volumes, finding efficiencies or offering new services.
What is BI used for in the Distributive Trades?
Some of the main applications include:
- Sales analysis: Enables you to uncover trends and spot gaps and opportunities; sales analysis feeds into forecasting, sourcing, promotions, stock control and inventory management.
- Customer analysis: Enables you to identify trends in customer behaviour, needs and satisfaction; customer analysis feeds into strategic marketing, relationship management, retention and acquisition strategies.
- Supplier analysis: Which are the best and worst performing suppliers across a variety of metrics such as lead times, payment times or quality? Understanding this enables you to streamline your supply chain and ensure you get the best prices and discounts.
- Marketing analysis: Enables you to track your marketing efforts across all channels to understand which promotions were most successful and to inform marketing strategy.
- Inventory analysis: Enables you to understand how to control your stock to reduce inefficiency and avoid out of stock situations.
Four Signs Your Business Would Benefit from BI Software:
- Are you relying on paper based systems? Moving to automated tools would save time taken filing and retrieving paper documents, reduce the risk of loss or damage to documents, and make it much easier to share and collate information.
- Do you have lots of data but no information? Your data may be stored electronically, but you find it hard to know what it is telling you as the reports you need are difficult or time consuming to run.
- Is it hard to get consistent information? If different departments and individuals within your business have their own spreadsheets, it can be hard to collate the information, or get a consistent view.
- Do you have a sense that you could improve your business processes, or a need to improve your profitability but you are not sure where to start, or how to measure success? BI tools will help you analyse the current situation, uncover opportunities to improve and track the success of improvement initiatives.
You now know what business intelligence software is and how it can benefit your business.
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